Markets gapped down on Friday and followed-through to the downside all morning.  The afternoon saw a sideways grind as the majority of the trading had been done for the day.  This action left all 3 major indices with ugly black candles that closed fairly close to the lows.  On the day SYP lost 2.00%, DIA lost 2.05%, and QQQ lost 2.10%.  The VXX gained 6.5% to 21.08 and T2122 fell well into the oversold territory at 7.04.  10-year bond yields went up to significantly 1.071% and Oil (WTI) lost only a fraction of a percent to $52.14/barrel.

Social Media, shorting funds, brokerage collateral calls from the trade clearinghouse, and politicians trying to make headlines on the subject continued to lead the talk on Friday.  Many brokerages partially lifted the restrictions on buying the social-media darling stocks and again the phenomenal rallies continued.  GME (+68%), AMC (+53%), etc. are a few examples of related moves on the day.  However, other shorted issues have also been the target of the Redditers and this weekend such as SI (silver commodity) and DOGE (Dogecoin cryptocurrency) which both made moves as the social media phenomenon tries to spread its wings.

On the stimulus front, the Democrats have openly said they hope for Republican support, but if not, they intend to use the budget process (reconciliation) to pass the proposed $1.9 trillion relief package with just a simple majority.  For their part, on Sunday, 10 GOP Senators tried to short-circuit the Democratic move by offering a $600 billion plan of their own in a letter to President Biden.  There was no response yet from the White House and the Republican Senators will meet with the President Monday, but Senate Majority Leader Schumer scoffed at a proposal less than one-third of the existing proposal and Treas. Sec. Yellen reiterated Sunday that the benefits of acting BIG far outweigh the costs in the long run.

Related to the virus itself, US infections continue to rage as the US.  The totals have risen to 26,767,229 confirmed cases and 452,279 deaths.  January was the deadliest month with just under 100,000 COVID deaths in the US.  However, the number of new cases continues the recent trend of falling and is almost back down to the pre-election level as the average new cases are now 150,903 new cases per day.  Still, deaths remain stubbornly high at 3,255 per day.  

Globally, the numbers rose to 103,594,874 confirmed cases and the confirmed deaths are now at 2,239,275 deaths.  In good news, the world’s average of new cases is down again to 528,616 per day, but mortality remains high at 13,870 new deaths per day. Portugal reached a critical point Sunday, with only seven open ICU beds in the whole country.  As a result, they began flying critical patients to islands and other countries. AZN also ended its conflict with Europe as both sides announced that AZN will ship 30% more vaccine to the EU in Q1 than it had been planning and 75 million more doses in Q2.  This avoids EU export restrictions on the AZN vaccine.  In the UK, they have reached a milestone, announcing today that all “eligible” nursing home residents have “been offered” vaccine.

Overnight, Asian markets were mostly strongly green.  India (+4.54%) and Indonesia (+3.50%) were clearly outliers, but Japan (+1.55%), Hong Kong (+2.15%), South Korea (+2.70%) are good indications of that region. In Europe, markets are green across the board so far today.  The FTSE (+1.12%), DAX (+1.40%), and CAC (+1.36%) are typical of the continent.  As of 7:30 am, US Futures seem to be following the rest of the world and are pointing to a gap higher at the open.  The DIA is implying +0.84%, the SPY implying +1.09%, and the QQQ implying +1.13% at this point.

The major economic news for Monday is limited to Jan Mfg. PMI (9:45 am) and Jan. ISM Mfg. PM (10 am).  Major earnings reports for the day include ON and OTIS before the open.  Then after the close, CBT, KMPR, NXPI, VRTX, and WMG report.

It looks like the Bulls are off and running worldwide today. Couple this with the “social media-driven short-squeezing” and it may be a strong day for the market. Be very careful if you do anything like follow the short squeezers. Volatility cuts both ways and you don’t want to be left holding a long taken late when the floor drops out of a particular ticker. As tempting as it may be, we are not lottery ticket buyers or fad followers. We’re traders.

Follow the trend, respect support and resistance levels, and don’t chase the moves you missed.  Remember to lock in your profits. It’s all about achieving trade goals and sticking to your discipline.  Remember, our job is to produce consistent gains…not catch record-breaking one-day moves. So, stick with your plan, maintain discipline and work your process.

Ed

Swing Trade Ideas for your consideration and watchlist: LEVI, XLB, SQ, ADM, LYFT, XLF, BAC, MGM, UAA. You can find Rick’s review of tickers on his YouTube Channel here. Trade your plan, take profits along the way, and smart. Also, remember to check for impending earnings reports. Finally, remember that any tickers we mention and talk about in the trading room are not recommendations to buy or sell.

🎯 Mike Probst: Rick, Got CTL off the scanner today. Already up 30%. Love it.

🎯 Dick Carp: the scanner paid for the year with HES-thank you

🎯 Arnoldo Bolanos: LTA scanner really works $$, thanks Ed.

🎯 Bob S: LTA is incredible…. I use it … would not trade without it

🎯 Malcolm .: Posted in room 2, @Rick… I used the LTA Scanner to go through hundreds of stocks this weekend and picked out three to trade:  PYPL, TGT, and ZS.   Quality patterns and with my trading, up 24%, 7% and 12%…. this program is gold.

🎯 Friday 6/21/19  (10:09 am) Aaron B: Today, my account is at +190% since January. Thanks, RWO HRC Flash Malcolm Thomas Steve Ed Bob S Bob C Mike P and everyone that contributes every day. I love our job.

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Disclosure: We do not act on all trades we mention, and not all mentions acted on the day of the mention. All trades we mention are for your consideration only.

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